CAPITAL & REGIONAL PLC (Incorporated in the United Kingdom) (UK Company number 01399411) LSE share code: CAL JSE share code: CRP ISIN: GB0001741544 ("Capital & Regional", the "Group" or the "Company") 9 March 2017 Full Year Results to 30 December 2016 Capital & Regional, the UK focused specialist REIT with a portfolio of dominant in-town community shopping centres, today announces its full year results to 30 December 2016. Asset management strategy driving strong income growth and underpinning dividend - 6.7% increase in Net Rental Income to GBP52.6 million (2015: GBP49.3 million) - Adjusted Profits(1) up 11.7% to GBP26.8 million (2015: GBP24.0 million) - 8.7% increase in total dividend to 3.39p per share for 2016, ahead of guidance Successful recycling of capital continuing into 2017 - Acquisition of The Exchange Centre, Ilford completed on 8 March 2017 for GBP78.0 million, reflecting NIY of 6.70% - Disposal of Ipswich joint venture in February 2017 delivering IRR of over 40% - Disposal of The Mall, Camberley for GBP86.0 million at NIY of 5.9% in November 2016 - Acquisition of The Marlowes, Hemel Hempstead and adjacent properties in February/March 2016 for GBP53.8 million at NIY of 7.0% Delivery of asset management initiatives supported by strong occupier demand - Capex investment of GBP21.2 million on Wholly-owned assets in 2016 including: - GBP6.2 million at Maidstone - refurbishment and TJ Hughes reconfiguration - GBP4.2 million at Wood Green - new Travelodge and extended Easygym - GBP2.9 million at Blackburn - new Ainsworth Mall entrance and units at Blackburn - New lettings and renewals at an average 18%(2) premium to previous passing rent and combined 2.1%(2) premium to ERV Enhanced balance sheet strength and flexibility - GBP372.5 million long-term refinancing completed on 4 January 2017 locking in historically low interest rates and providing flexibility for asset recycling - Weighted average debt maturity including new Ilford debt, increased from 3.6 to 7.8 years(3,4,6) - Basic and EPRA NAV per share resilient, at 68p (2015: 72p and 71p respectively), reflecting a 1.6p reduction attributable to implementing the new long term debt package and a further 1.2p from the 1% increase in stamp duty - Average cost of debt after Mall refinancing and Ilford acquisition reduced to 3.26% from 3.51%(6) 2016 2015 Change See-through Net Rental Income GBP52.6m GBP49.3m +6.7% Adjusted Profit(1) GBP26.8m GBP24.0m +11.7% Adjusted Earnings per share 3.8p 3.4p +11.7% IFRS (Loss)/Profit for the period GBP(4.4)m GBP100.0m Total dividend per share 3.39p 3.12p +8.7% Net Asset Value (NAV) per share 68p 72p -4p EPRA NAV per share 68p 71p -3p Proforma group net debt(3) GBP328.6m GBP338.1m -GBP9.5m Proforma see-through net debt to property value(3,5) 42% 41% +1 p.p. See-through net debt to property value at date of results(3,4,5) 46% 45%(6) +1 p.p. (1) Adjusted Profit is as defined in the Glossary and Note 1 to the Financial Statements.It incorporates profits from operating activities and excludes revaluation of properties and financial instruments, gains or losses on disposal, exceptional items and other defined terms. We previously used 'Operating Profit' but have amended the term to clarify that it is an adjusted measure. The only change to the definition is to incorporate tax charges or credits relating to operating activities. A reconciliation to the statutory result is provided in the Financial Review. EPRA figures and a reconciliation to EPRA EPS are shown in Note 5 to the Financial Statements. (2) Wholly-owned portfolio excluding The Mall, Camberley given its disposal in November 2016 (3) Reflecting refinancing of Mall assets completed on 4 January 2017, debt maturity is assuming exercise of extension options. (4) Further adjusted for the Ipswich disposal completed on 17 February 2017 and Ilford acquisition completed on 8 March 2017. (5) See-through net debt divided by property valuation. (6) 2015 reflects the Hemel Hempstead acquisitions completed in February/March 2016. Commenting on the results, John Clare, Chairman said: "I am pleased to report that Adjusted Profit has grown by 11.7% to GBP26.8 million. This represents another strong performance in a year where the focus has shifted decisively towards boosting income from delivery of the asset management and development initiatives across the portfolio. "The results have supported an increase in the dividend for the year of 8.7%, ahead of previous guidance. Reflecting our confidence in the growth prospects of the business, underpinned by our ongoing Capex investment, the Board is reaffirming its commitment to a target of annual dividend growth in the range of 5- 8% in the medium-term." Hugh Scott-Barrett, CEO added: "Whilst the business environment may be challenging, the prospects for Capital & Regional are exciting. Our assets have proven to be very resilient and Capex investment over the last two years has provided a strong platform for future income growth. This, supported by the high demand we continue to see from occupiers for the attractive and affordable space in our vibrant centres, provides us with confidence in our ability to maintain and grow the dividend. "We expect to benefit from the average 13.5% reduction in rateable values when they are applied next month and our portfolio of asset management initiatives continues to grow with leisure reconfigurations providing an opportunity to reposition both the Hemel Hempstead and Ilford schemes. In addition we are looking for planning consent for the extension and residential development to be granted at Walthamstow during the year whilst the development of master plans in Luton and Wood Green are likely to be transformational for both the town centre and our shopping centres which sit at the heart of each community. "Looking forward, there is no shortage of accretive opportunities both within our existing portfolio and beyond. This underpins our confidence in the growth prospects of the business by enabling us to focus on those initiatives which generate the best returns." For further information: Capital & Regional: Hugh Scott-Barrett, Chief Executive Tel: 020 7932 8000 Charles Staveley, Group Finance Director FTI Consulting: Richard Sunderland Tel: 020 3727 1000 Claire Turvey Email: [email protected] Notes to editors: About Capital & Regional plc Capital & Regional is a UK focused specialist retail REIT with a strong track record of delivering value enhancing retail and leisure asset management opportunities across a c. GBP1 billion portfolio of in-town dominant community shopping centres. Capital & Regional is listed on the main market of the London Stock Exchange and has a secondary listing on the Johannesburg Stock Exchange. Capital & Regional owns seven shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green. It also has a 20% joint venture interest in the Kingfisher Centre in Redditch. Capital & Regional manages these assets, which comprise approximately 820 retail units and attract c. 1.7 million shopping visits each week, through its in-house expert property and asset management platform. For further information see www.capreg.com. Forward looking statements This document contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or implied by these statements. Many of these risks and uncertainties relate to factors that are beyond the Group's ability to control or estimate precisely, such as future market conditions, currency fluctuations, the behaviour of other market participants, the actions of government regulators and other risk factors such as the Group's ability to continue to obtain financing to meet its liquidity needs, changes in the political, social and regulatory framework in which the Group operates or in economic or technological trends or conditions, including inflation and consumer confidence, on a global, regional or national basis. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this document. The Group does not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document. Information contained in this document relating to the Group should not be relied upon as a guide to future performance. Chairman's statement Performance Overview Capital & Regional's strong performance in 2016, against a background of increased economic uncertainty, has demonstrated the resilience of the business model. This has led to an 8.7% increase in dividend to 3.39p for the full year, delivering an attractive dividend yield to shareholders. I am pleased to report that Adjusted Profit increased by 11.7% to GBP26.8 million. This is an excellent result in a year where, building on the solid foundations we have successfully created over the last few years, our focus shifted decisively towards boosting income from delivery of the asset management and development initiatives across the portfolio. The performance is all the more creditable as, during the course of the year, the BHS administration, while providing a medium term opportunity to create value and improve the tenant mix, did inevitably result in a short term loss of income. NAV per share as at 30 December 2016 was 68p compared to 72p at the beginning of the year. This reflects the impact of one-off costs associated with the successful long-term refinancing of the group's core banking arrangements, the impact of stamp duty increases as well as the modest fall in valuations since the EU referendum in June 2016.